Five Ways Real-Life Advisors Are Preferred Over Robo Advisor Services
While technology has made tasks like banking, bill-pay and budgeting extremely convenient, Americans still prefer working with a human being opposed to a robo advisor when it comes to their finances, according to NerdWallet’s 2020 Survey. Why? Because even as artificial intelligence becomes smarter, it can’t make up for the personalization and connection that comes with working with a real-life person.
A robo advisor may seem like a simple, easy solution to financial planning, but what happens when you have a question you can’t find the answer to online? Who do you call? Where do you find advice?
Answers to these questions can make a big difference.
Below are 5 things the team at Scarborough Capital Management wants investors to know about working with a real-life financial advisor versus a robo advisor.
Financial Advisors Help with Financial Planning
Robo advisors may be good at helping you choose investments, but a financial advisor takes this process a step further.
At Scarborough Capital Management, our financial advisors take a holistic approach to helping clients manage their financial lives. Our team goes beyond simply helping you construct a portfolio by making sure the investments you choose align with your risk tolerance, help you plan for taxes, work towards combat inflation in retirement, and help you plan for your goals, such as saving for your children’s education or buying a home. We want to make sure our clients’ portfolios are diversified and incorporate concerns such as healthcare and cost of living.
How do we do this?
Before our financial advisors ever offer advice, they will take time to get to know you and your goals. Only then can we really help you choose the personalized strategies to reach your goals.
Financial Advisors Help You Make Adjustments When Your Goals Change
When you work with a robo advisor, you choose from a predefined list of goals when you set up your profile, then the program automatically spits out the math you typically need to reach those goals in a given time period.
But what happens if those goals change? What happens if you want to achieve something that isn’t listed in the predefined drop-down menu?
Your life is incredibly unique and complex. A financial advisor can help you do more than just manage your money. For example, at Scarborough Capital Management, our financial advisors help clients financially prepare for starting their own business. They help clients sort through the sale of their first home. They help clients crunch the numbers to figure out what a move will do to their financial plan. Our team helps clients understand their specific retirement plans, be it a 401(k), a TSP or a 403(b). We are there to help with specific questions, such as how much you should have in your TSP to retire, or what you should do with your 401(k) if you change jobs.
For more on what our comprehensive financial planning looks like, read our recent blog post: What’s the Difference Between Custom Allocation and a ‘Cookie Cutter’ Plan?
Financial Advisors Help You Prepare for the What-Ifs in Life
Unlike a robo advisor, a Scarborough financial advisor is there to guide you through tough times – and prepare for them – because the truth is, life happens. You may lose your job in a recession. Your spouse may fall ill. You may get divorced.
In a perfect world, none of this happens to you and you live a fulfilling life free from heartache and pain. But the truth is, financial storms are bound to happen. And when they do, a financial advisor can help you navigate the financial stress and insecurity that comes with it.
Financial Advisors Help Keep Your Emotions in Check
Money is emotional, there’s no doubt about it. Perhaps the biggest benefit of working with a financial advisor opposed to a robo advisor is that a real-life human being can help keep your emotions in check.
A simple conversation can help you avoid making a mistake that could derail your finances – and your future – like selling your investments when the market dips because of fear, or letting greed guide your decision-making process when the market is up.
A financial advisor can’t stop you from feeling these types of emotions. But a financial advisor can help you work through your feelings so you can refocus and see the bigger picture.
Financial Advisors Hold You Accountable
Just about anyone can benefit from having an accountability partner, and a financial advisor can serve as just that, whether your goals are saving for the down payment on a home, retiring early or starting your own business.
Planning for your financial goals is often a long-term game. Even if you have a lot of motivation when you first get started, in our experience, that motivation can wane over time.
In the same way a personal trainer can help keep you focused on your fitness goals, or a business coach with your entrepreneurial journey, a financial advisor can help keep you motivated to stick to your financial plans.
How Scarborough Capital Management Can Help
Knowing how to crunch numbers and diversify a portfolio is one thing. But being able to help you craft a comprehensive financial plan that leads to the life of your dreams and helps prevent you from making costly mistakes that could derail your retirement is something else entirely.
Don’t overlook the added value of having a human advisor in your corner, ready to serve as your sounding board and reminding you of your big-picture, long-term goals. Remember, retirement is different than it once was. There are new challenges and new concerns.
To learn more about what it’s like to work with a financial advisor at Scarborough Capital Management, visit our website.